July 4, 2011


Vietnam's feed price hike troubles farmers



Animal feed prices in Vietnam have increased by up to 50% so far this year, causing numerous difficulties to local farmers, said the Livestock Production Department under the Ministry of Agriculture and Rural Development.


Local feed producers recently announced an rise in feed prices from VND150 (US$0.0073) to VND250 (US$0.0121) per kg. The price for raw materials used in animal feed production has risen faster than the proportion of livestock product prices, reducing scale and economic efficiency.


Farmers on the outskirts of Hanoi have said that feed prices have risen from VND11,000 (US$0.535) to VND13,000 (US$0.632) per kg. The 52S brand of animal feed, produced by the CP Animal Feed JSC has fetched prices of between VND220,000 (US$10.7) and VND310,000 (US$15.085) per 25 kg.


Animal breeders in central province of Thanh Hoa said that feed prices had never increased by such an extent as recently observed. Raising a 75 kg pig costs around VND5 million (US$243.31) on averages, making pig prices go up sharply in recent months by 10% to 40%.


Many farmers in different localities said if animal feed prices continued to rise, they would consider changing business in order to avoid further risks.


While Vietnam has been viewed as a country with great agricultural potential, its animal feed sector has experienced periodic shortages of raw materials, 50% of which is imported from abroad, causing local resource wastage and instability due to volatile exchange rates.


Hoang Kim Giao, head of the Livestock Production Department, said that the country's animal feed production has not kept the growth pace of the breeding industry.


By 2020, Vietnam is expected to need around 15 million tonnes of animal feed a year to placate domestic demand, Giao added.


Many animal feed producers have been restructuring, cutting costs and co-operating with related stockholders in order to cope with the current situation.


The Vietnam Animal Feed Association also confirmed that producing a suitable volume of quality raw material is also important, seeing as this was a current weak point in the system.


The association has proposed the redistribution of land and investment planning in the production of raw materials for the animal feed industry, which would also need more attention from ministries in terms of taxes and administrative policies affecting stabilized prices.

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